Question: Required information [The following information applies to the questions displayed below.] Fo...

Required information

[The following information applies to the questions displayed below.]

For many years, Yelena Company manufactured a single product called a Mono-Relay. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called a Bi-Relay that has become increasingly popular. The Bi-Relay is a more complex product, requiring 1.00 hour of direct labor time per unit to manufacture and extensive machining in the automated portion of the plant. The Mono-Relay requires only 0.50 hour of direct labor time per unit and only a small amount of machining. Manufacturing overhead costs are currently assigned to products on the basis of direct labor-hours.

Despite the growing popularity of the companys new Bi-Relay, profits have been declining steadily. Management is beginning to believe that there may be a problem with the companys costing system. Materials and labor costs per unit are given below:

	Mono-Relay			Bi-Relay
Direct materials	$	66.00		$	81.00
Direct labor (0.50 hour and 1.00 hour @ $17.00 per hour)	$	8.50		$	17.00

Management estimates that the company will incur $735,360 in manufacturing overhead costs during the current year and 18,000 units of the Mono-Relay and 7,000 units of the Bi-Relay will be produced and sold.

2.	Management is considering using activity-based costing to apply manufacturing overhead cost to products for external financial reports. The activity-based costing system would have the following four activity cost pools:

Activity Cost Pool	Activity Measure	Estimated Overhead Cost
Maintaining parts inventory	Number of part types	$	128,960
Processing purchase orders	Number of purchase orders		224,800
Quality control	Number of tests run		309,240
Machine related	Machine-hours		72,360
		$	735,360

	Expected Activity
Activity Measure	Mono-Relay	Bi-Relay	Total
Number of part types	656	956	1,612
Number of purchase orders	3,356	1,140	4,496
Number of tests run	5,756	9,706	15,462
Machine-hours	1,156	1,256	2,412

Required information [The following information applies to the questions displayed below.] For many years, Yelena Company manufactured a single product called a Mono-Relay. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called a Bi-Relay that has become increasingly popular. The Bi-Relay is a more complex product, requiring 1.00 hour of direct labor time per unit to manufacture and extensive machining in the automated portion of the plant. The Mono-Relay requires only 0.50 hour of direct labor time per unit and only a small amount of machining. Manufacturing overhead costs are currently assigned to products on the basis of direct labor-hours. Despite the growing popularity of the companys new Bi-Relay, profits have been declining steadily. Management is beginning to believe that there may be a problem with the companys costing system. Materials and labor costs per unit are given below: Mono-Relay Bi-Relay Direct materials $ 66.00 $ 81.00 Direct labor (0.50 hour and 1.00 hour @ $17.00 per hour) $ 8.50 $ 17.00 Management estimates that the company will incur $735,360 in manufacturing overhead costs during the current year and 18,000 units of the Mono-Relay and 7,000 units of the Bi-Relay will be produced and sold. 3. Using the activity rates you computed in part (2) above, do the following: a. Determine the per unit amount of manufacturing overhead cost that would be assigned to each product using the activity-based costing system. (Round your final answers to 2 decimal places.) b. Compute the unit product cost of each product. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)